Solar Power Purchase Agreements

Your options for producing reportable renewable energy away from your site

Fully Funded Solar Solution Calculator

Generating your own renewable energy is vital to deliver on your Net Zero ambitions and energy cost security

In today’s highly competitive landscape, UK businesses must innovate beyond conventional strategies to maintain a leading edge. Generating renewable energy, particularly through solar power, offers a strategic advantage that aligns with both financial and environmental goals. By embracing solar energy, companies can significantly reduce their carbon footprint, in line with the UK’s ambitious sustainability targets, while also satisfying growing regulatory requirements and consumer expectations for eco-friendly practices.

power purchase agreements for commercial solar PV solutions

Solar Purchasing Power Agreements

The economic benefits are equally compelling. As the cost of solar technology continues to decrease, coupled with attractive private investment opportunities, businesses can access 100% renewable energy without upfront capital expenditure. This not only secures long-term low energy prices but also insulates businesses from the volatility of fossil fuel markets and the inevitable rise in energy costs.

Moreover, investing in solar energy strengthens corporate social responsibility (CSR) initiatives, enhancing relationships with stakeholders and creating a positive community impact. A visible commitment to sustainability not only elevates a company’s reputation but also resonates with environmentally conscious consumers and investors.

Harnessing solar energy enables UK businesses to achieve significant cost savings, secure stable energy prices, and support sustainability objectives, all while reinforcing their competitive position and brand reputation.

However, for many businesses, on-site generation may not be feasible due to site limitations, the transient nature of property portfolios, or the scale required to meet sustainability targets. This guide will explore alternative options for generating renewable energy off-site, allowing businesses to realize both cost and carbon savings, even when on-site solutions are not viable.

Direct Wire PPA’s

A Direct Wire (or Private Wire) PPA creates a direct connection between the energy generator and consumer, either on-site (e.g., roof-mounted solar) or via a physical link. This bypasses the Transmission and Distribution networks, lowering costs compared to indirect PPAs. Off-site Direct Wire PPAs require contracts and additional considerations like installation, maintenance, and performance guarantees.

A Direct Wire PPA generally doesn’t require a separate electricity supplier contract unless facilitation is needed. However, significant changes in consumption can affect existing contracts, so keeping your supplier informed is key to avoiding penalties.

Benefits of PPAs:

Cost Savings: By bypassing grid costs, businesses save significantly on energy bills with direct renewable energy.
Energy Security & Reliability: A direct connection ensures reliable energy supply, reducing dependence on the national grid.
Sustainability: Using renewable energy directly cuts carbon emissions, supporting sustainability goals.
Financial Stability: Fixed energy prices offer long-term financial predictability, shielding businesses from market volatility.

Nature - direct power purchase agreements for solar solutions

Power purchase agreements for rooftop solar PV solutions

A Direct Wire Power Purchase Agreement (PPA) allows a business to connect directly to renewable energy sources, such as solar power, installed on-site. Here’s how it works:

Physical Connection: Shawton Energy installs a solar asset on the business premises, either on the roof or available land. This installation is fully funded by Shawton Energy, so the business faces no upfront costs.
Fixed Energy Costs: The business purchases all the energy generated by the solar asset at a fixed price, with a small annual inflation adjustment, ensuring predictable long-term energy costs.
Ownership & Maintenance: Shawton Energy retains ownership of the solar asset for 15–25 years, handling all operation and maintenance during the contract period. At the end of the term, ownership of the asset transfers to the business, allowing it to continue using renewable energy at no additional cost.
Supplemental Energy Needs: Typically, the solar project covers 20–30% of a business’s energy demand. For the remaining energy needs, the business will maintain an import contract with an energy supplier.
Off-Site Installations: In cases where on-site installation isn’t feasible, a solar asset can be installed on an adjacent greenfield site, with the same direct-wire connection ensuring that energy flows directly to the business, bypassing the grid.

This setup provides significant long-term energy cost savings, energy security, and reduced carbon emissions, all with minimal operational hassle.

FAQs

What are Embedded Benefits?

These are extra payments on top of the fixed price for electricity included in a PPA. They essentially reward electricity generators that contribute to their local lower-voltage network (without using the infrastructure of the main national ‘distribution’ network).

What’s the System Sell Price?

The ‘cash-out’ price set by the system operator. This is used to settle the difference between the amount of energy that was contracted to be generated or consumed in each half hour trading period and the actual amount that was generated or consumed.

What is additionality?

Organisations buying a PPA with additionality are guaranteeing to purchase the offtake of a new project at a fixed price. This positively influences the financial investment decision that allows a new renewable generation project to be built, which will bring additional green energy to the grid.

What are REGOs?

REGO is short for Renewable Energy Guarantee of Origin. REGOS are official certificates to prove where electricity was generated. REGOs certify that the electricity you’re generating is renewable. When a supplier buys this power from you, they’ll also buy the relevant REGO certificates from you.

What’s the Retail Price Index?

The Retail Price Index (RPI) is a measure of inflation published monthly by the Office for National Statistics. It measures the change in the cost of a representative sample of retail goods and services.

What are Contracts for Difference CFD?

Contracts for Difference (CFDs) is a UK government-backed scheme to support low-carbon electricity generation. Each year, the government holds an auction to buy a specified amount of electricity. Electricity generators submit bids to develop renewable projects. This involves a rigorous application process and competition is usually high. Successful bidders form a contract with the government-owned Low Carbon Contracts Company.

Next Steps

Start the journey with an initial exploratory call with Shawton Energy

It’s as simple as getting in touch. If you’re interested in talking about how a funded solar energy solution can help your business then all we need to know is more about your business such as your site(s) locations, annual energy usage and how much you’re buying your energy for. Once we have this information we can set up an initial 1-hour exploratory call with one of our specialists to discuss the available options for you and tell you more about us as a business but more importantly for us to learn more about your business such as business objectives, CSR strategy and how decisions are made within your business. Following the initial call, it is usually useful to come to your site and meet with you and your colleagues to discuss in more detail.

hello@shawtonenergy.co.uk

+44 (0) 1925 794874

Download Full Brochure